Why Appraise When Appraisal Is Waived ?

Margaret 

It is like when the home inspection is waived and suddenly a home inspection is scheduled -  Oh the buyer just wants to know what to expect - next thing you know you receive a list of repairs 

Thanks for clarifying the waiver process because trying to explain it can be a little bit  maddening

Morning Margaret.

A good question to which I have no answer.  We are seeing a lot of inspections being waved, but not appraisals

My answer is that banks don't make sense and the people running banks have quite a history of not making sense, doing illegal and immoral things, thus I don't trust banks.

Good morning Margaret. Have had this issue before. In one case the bank denied the loan because the appraisal was signifcantly below the contract price but loan to apprasied value was about 60%. Buyer said happy wife, happy life and I will pay cash! And he did closing the accounts he had at the bank. Enjoy your day.

With so many markets across the country short on inventory, and prices soaring, I think it is a good idea to have an appraisal.  Sometimes homebuyers get so caught up in the anxiety of competing with one another, that they bid outrageously high.  It's one thing to do it when actual value is there, but quite another when it is not.  Appraisals can act as a reality check.

CONGRATULATIONS Margaret, on having this blog FEATURED in the Old Farts Club group!  

Good morning Margaret! Interesting material. WHo would have thought 2 years ago, we would be seeing such things

Margaret in order for a Lender to waive the appraisal, they need to receive an appraisal waiver from either the Fannie Mae Automated Underwriting System (DU) or the Freddie Mac Automated Underwriting System(LP) in order for Fannie Mae or Freddie Mac to back the loan.  If the Lender waives the appraisal and does not get the appraisal waiver from LP or DU, then the loan will not be backed and the Lender is on the hook for the money, they cannot sell the loan.

Well looking at it from a one up point of view:  The wife wanted the house regardless of what it might cost.  The husband reluctantly said yes but wants the appraisal so he can let her know how much she overpaid for the house.

All that waiver is a waiver of making the seller come down in price if it appraises low, but we knew that!

Hello Margaret - in our market, when an appraisal is waived as part of the accepted purchase agreement that does not mean that the lender does not require it as part of their due diligence.  Does the buyer have the necessary funds, the ability to make up any difference as well as the willingness to do so.  Such things matter.  To buyers.  And sellers.  Even to lenders.